Govt pays 20.87% to fill tender

Press, 15 February 1986, Page 23

Govt pays 20.87% to fill tender

PA Wellington Long-term interest rates remained firm yesterday as the Government paid a top rate of 20.87 per cent to fill its S4OOM February stock tender. This was up from a top rate of 20.22 per cent at the January tender and indicates that interest rates are not yet on the much-predicted downward path. Average rates for all three maturities were above those of last month’s similar tender.

September 1989 stock averaged 20.561 per cent (last month 19.969 per cent), June 1991 stock averaged 19.777 per cent (19.421 per cent) and July 1994 stock averaged 19.019 per cent (18.758 per cent). Dealers bid a total of

S9BOM for the S4OOM of stock on offer, up from $962M bid last month. The tender was the last in the financial year and brought the total amount raised since April to just under S3B. Dealers said overseas bidding had helped restrain the rise in rates at the tender, but this had more than been countered by local fears of an expanding deficit and of high Government borrowing in the new fiscal year. September 1989: Offered, $100M; bid $206.5M; sold $100M; successful yields, 19.94 to 20.87 per cent; weighted average, 20.561; previous average, 19.969 per cent.

June 1991: offered, SISOM; bid, 5396.8 M; sold, SISOM; successful yields,

19.4 to 19.89 per cent; weighted average, 19.777; •previous average, 19.421 for October 1991 stock.

July 1994: offered, SISOM; bid, 5376.7 M; sold, SISOM; successful yields, 18.75 to 19.1 per cent; weighted average, 19.019; previous average, 18.758. Merchant banks took $162.3M of the stock, putting in 46 successful bids. Sharebrokers took 588.6 M (68 successful bids), trading banks 556.8 M (21 bids), life insurance offices S6IM (31 bids), finance companies SI6M (7 bids), Government organisations SI2M (9 bids), savings banks SIM (1 bid) and building societies SIM (4 bids). Small amounts went to private bidders, who put in four successful bids.